UK water regulator Ofwat has ordered Southern Water to pay £126mln for “serious failures” at its sewage treatment sites and for “deliberating misreporting” its performance.
Southern Water will pay a rebate of £123mln to customers through their bills and a fine of £3mln for failings between 2010 and 2017.
Ofwat said a two-year investigation into Southern Water’s conduct found the company failed to make necessary investments, which led to equipment failures and spills of wastewater into the environment.
The regulator said Southern Water also manipulated its wastewater sampling process, which meant it misreported information about the performance of a number of sewage treatment sites.
“What we found in this case is shocking. In all, it shows the company was being run with scant regard for its responsibilities to society and the environment,” said Rachel Fletcher, chief executive of Ofwat.
“It was not just the poor operational performance, but the co-ordinated efforts to hide and deceive customers of the fact that are so troubling.”
Ofwat reduced its initial fine from £37.3mln on the basis that Southern Water would pay its customers.
Southern Water wastewater customers will receive a £61 rebate on their bills, with £17 in 2020/21 and £11 in each of the following four years.
The Environment Agency has launched a criminal investigation into the case and has the power to take court action if the companies' actions are found to have hurt the natural environment.
The investigation is understood to be at an early stage.
Southern Water was fined £2mln three years ago for flooding the Kent coast with raw sewage, which left beaches closed to the public for nine days. It received a £200,000 fine in 2013 for similar offences.